Angry Devon councillors have hit out at government cash settlements which have left them facing a financial crisis while London boroughs rub their hands with glee.

Figures from a recent government ‘fair funding review’ have left rural councils reeling while handing major cash boosts to metropolitan districts and London boroughs.

Members of South Hams Council’s budget advisory committee heard that the amount of money allocated to the district by the government would fall by more than 40 per cent by the 2028/29 financial year.

The district is facing its highest ‘budget gap’ for a decade, at £2.5million, according to finance director Lisa Buckle. Members heard that the government’s strategy meant the council would only be able to balance its books by raising council tax by the maximum 2.99 per cent every year.

“Rural authorities have suffered the biggest loss in funding,” said Ms Buckle.

And the council’s deputy chief executive Steve Mullineaux added: “The reality is that there is no money. We are absolutely in a financial crisis.”

Council leader Dan Thomas (Lib Dem, Newton and Yealmpton) said the council would have no choice but to implement the maximum possible increase in council tax, taking the tax for a Band D property over £200.

“We are given no choice,” he said. “This government, and the previous government, and every future government, seems to base financing local authorities on the premise that they will put council tax up by the maximum amount every year.

“They trumpet that they have given local authorities more money, which is disingenuous to the nth degree, because they haven’t. What they have done is enforce the full council tax rise.”

He said he was with the finance portfolio holder from Islington Council in London when the fair funding review was first discussed.

“He was rubbing his hands with glee at what he thought was going to be the finest settlement, and if you live in Islington, it is very fair indeed.”